Middle East investors are leading their global peers in digital asset allocations as institutional adoption moves increasingly from exploration to implementation, according to State Street’s 2026 Digital Assets Study.
The global study of 300 asset managers, asset owners and wealth managers across North America, EMEA and APAC found that Middle East investors have greater exposure than their global peers to bitcoin, digital cash including stablecoins, and the tokenization of real-world private and public assets, excluding Ethereum.
Institutional investors in the region are also ahead in managing and distributing digital assets, with 40 percent already doing so as part of their day-to-day operations, compared with 35 percent globally.
Digital assets seen going mainstream
Confidence in the long-term prospects of digital assets has risen sharply among Middle East investors. Nearly half, or 45 percent, of regional respondents expect digital assets to become mainstream within five years, if they have not already. That compares with 28 percent in 2025 and just 5 percent in 2024.
Market liquidity was identified as the most important factor in accelerating digital asset strategies across the region.
“The Middle East is emerging as one of the world’s most advanced regions for institutional digital asset adoption,” said Angus Fletcher, Head of Digital Asset Solutions at State Street.
“Our research shows that investors in the region are moving beyond exploration and into implementation, with greater exposure to tokenized assets than their global peers.”
Fletcher said investors are increasingly focused on practical outcomes, including reducing costs, creating new revenue streams and transforming custody, payments and fund administration. At the same time, he said scaling digital assets will require deeper market liquidity, robust infrastructure and continued regulatory clarity.
Custody and payments seen as key areas of impact
Middle East respondents expect digital asset adoption to have its greatest material impact on custody operations, cited by 60 percent of respondents. Payments followed at 55 percent, while fund administration and fund issuance were each cited by 45 percent.
Cost reduction was identified as the largest expected benefit by half of Middle East respondents, followed by the creation of new revenue streams at 35 percent.
Asset managers in the region are primarily targeting institutional investors for digital asset distribution. However, 70 percent also plan to serve digitally native retail investors, significantly above the global figure of 45 percent.
ETFs emerged as the most important distribution vehicle, with 45 percent of asset managers describing them as “very important” for managing and distributing digital assets.
“As digital asset markets continue to mature, long‑term success will be defined not by speed, but by resilience, interoperability, compliance, and trust. The Middle East is well positioned to lead the next phase of institutional market evolution. By embedding modern market infrastructure and digital asset capabilities into its growth strategy, the region can broaden global market participation and investment access,” Fletcher added.
Global adoption and allocations increase
Globally, 51 percent of respondents expect digital assets to become mainstream within five years, up from 42 percent in 2025 and 11 percent in 2024. Only 3 percent believe digital assets will never become mainstream.
Operational readiness is also increasing, with 35 percent of respondents already managing or distributing digital assets and another 28 percent having provider relationships and infrastructure in place to respond to client demand.
Average digital asset allocations currently stand at around 11 percent and are expected to rise to 17 percent over the next three years, compared with allocations of 7 percent rising to 16 percent in the 2025 study.
Read: Federal Reserve proposes new stablecoin rules under GENIUS Act
Regulation, cybersecurity take priority
As institutional adoption grows, investors are placing greater emphasis on the resilience and reliability of digital asset infrastructure. Experience operating within an appropriate regulatory framework was the most important characteristic of a digital asset service provider globally, cited by 69 percent of respondents.
Cybersecurity ranked second at 54 percent, followed by financial strength at 47 percent.
“Five years ago, most institutions were trying to decide whether digital assets mattered,” Fletcher said. “Today the conversation is much more practical. Investors are spending less time debating the technology and more time focused on infrastructure, operations, regulation and risk.”
Respondents expect digital assets to have the greatest material impact on custody, at 66 percent, followed by payments at 54 percent and fund issuance at 51 percent.
Fund issuance and tokenization were the leading strategic priority, cited by 52 percent of respondents.
